If the Dollar Appreciates Relative to Foreign Currencies, Then

question 66

Multiple Choice

If the dollar appreciates relative to foreign currencies, then:

• A) U.S. goods will look cheaper to foreign buyers
• B) Foreign goods will look more expensive to U.S. buyers
• C) Net exports of the U.S. will increase
• D) Foreign buyers will find U.S. goods become more expensive

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Definitions:

Constant Rate

A consistent, unchanging speed or pace at which something occurs or changes over time.

Diminishing Marginal Returns

The principle that adding an additional factor of production results in a smaller increase in output after a certain point.

Total Product

The total output or production by a firm using a given amount of inputs within a specific period.

Variable Input

A resource or factor of production whose quantity can be changed easily in the short term to adjust production levels.